I love this question! I have clients right now who pay more for collision coverage than they could ever collect on a total loss. It make no sense at all, it's just what they've always done.
There's a loose formula that I use in advising my clients about insuring an older vehicle. Look on KBB.com or Edmunds and get a rough idea of what your car is worth. Don't use the "clean retail". That's completely unrealistic. Use the average trade or rough. It'll be closer to the truth. Also check autotrader to get a range of what the cars are being listed for. Once you have a pretty good idea of what your car is worth, compare it to the cost of your physical damage coverage. If the cost of the coverage is more than 10% of the value, you might consider dropping the coverage. That means that, in about 2-3 years, you'd spend more than the value of the car. If you do have an accident, you get to make the decision on whether to repair the car or replace it. You've already saved enough to do either(if you haven't spent your savings).
Bottom line, be aware of what your vehicles are worth and act accordingly. Spending money on coverage that wouldn't pay much doesn't make a whole lot of sense. That's not your agent's place to decide for you, but we deal with it a lot and can make a suggestion. Find a good agent you can trust and go through the process. You'll save money in the long run.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
I rarely recommend that any driver drop collision coverage. Regardless of the premium there will be a sum recovered if the car is damaged in a collision and that might be extremely important to the customer. I do advise them that as the car loses value the amount they will recover drops as well and that for some older cars a minor collision would result in the car being declared a “total.”
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There's a loose formula that I use in advising my clients about insuring an older vehicle. Look on KBB.com or Edmunds and get a rough idea of what your car is worth. Don't use the "clean retail". That's completely unrealistic. Use the average trade or rough. It'll be closer to the truth. Also check autotrader to get a range of what the cars are being listed for. Once you have a pretty good idea of what your car is worth, compare it to the cost of your physical damage coverage. If the cost of the coverage is more than 10% of the value, you might consider dropping the coverage. That means that, in about 2-3 years, you'd spend more than the value of the car. If you do have an accident, you get to make the decision on whether to repair the car or replace it. You've already saved enough to do either(if you haven't spent your savings).
Bottom line, be aware of what your vehicles are worth and act accordingly. Spending money on coverage that wouldn't pay much doesn't make a whole lot of sense. That's not your agent's place to decide for you, but we deal with it a lot and can make a suggestion. Find a good agent you can trust and go through the process. You'll save money in the long run.